Gold investors' hopes of seeing the commodity surge higher this week turned sour when prices first gave a gloomy indication at the opening of trade earlier this week.
The yellow metal commodity traded further down on the movement pattern displayed on Monday yesterday after failing to break above $1,800 after several attempts to break through it over the past week still failed.
Following the release of China's economic data during the Asian session yesterday, which declined compared to expectations, has provided support for the strengthening of the US dollar currency, with market sentiment seen as risk-off in addition to suppressing the price of gold.
The US dollar as a safe-haven currency gained an advantage in the risk-off market sentiment, but the situation failed to be taken advantage of by gold as a safe-haven asset which experienced depreciation again.
This shows that the attraction of gold assets is lower at this time with the possibility that investors prefer to increase their cash holdings.
Investors are now looking forward to the release of United States (US) retail sales data and also the minutes of the FOMC meeting to see the movement of the US dollar this week which will also affect the current gold price change.
Paying attention to the price movement on the XAU/USD chart which measures the value of gold against the US dollar, it is seen that the price of gold is down around $30 as of early trading yesterday, plunging from the 1800.00 resistance level after prices tested the zone throughout the past week.
Yesterday's daily low has reached the level of 1773.00 after crossing the support level of the Moving Average 50 (MA50) on the 1-hour time frame on the XAU/USD chart to signal an early change in the bearish trend.
Continuing at the opening of the Asian trading session this morning (Tuesday), the price that has moved horizontally below the 1785.00 zone since the end of the last New York session has continued to decline back to test the level that the price hit yesterday.
With the displayed pattern, the analyst sees the tendency of the price to continue falling lower towards the concentration zone at 1760.00 after the zone still managed to cover the fall in price entering this third week.
If the zone succeeds in price penetration, the lower fall for gold is predicted to shrink to the RBS (resistance become support) zone of 1740.00 before the next expectation to reach the 1720.00 level which is the focus.
On the other hand if the price manages to bounce back, breaking the MA50 level barrier will expect the resistance zone at 1800.00 to be tested again with a more bullish indication for gold price movement.
Further, prices that continue to strengthen will target some previous focus levels such as the 1815.00 and 1830.00 zones to record the latest 7-week highs.
